Food & Agri Update - 7 June

World Food Safety Day 7 June 2024

World Food Safety Day on 7 June 2024 will draw attention to food safety incidents. This year’s theme underlines the importance of being prepared for food safety incidents, no matter their size. 

Resources available at World Food Safety Day 2024 (who.int)

Also EFSA Prepare for the unexpected - EFSA marks World Food Safety Day 2024 | EFSA (europa.eu)

Food Safety – Have a Crisis Management Plan

All businesses, no matter what size are likely to experience a crisis situation; it is a matter of ‘when’ rather than ‘if’. This could be an operational incident that escalates or an external event that impacts the business.  Crises can impact operations, damage reputation and the bottom line. A badly handled crisis can destroy a business.  In the middle of dealing with the unexpected it is really important there is structure that can guide the company, ensure notifications and decisions are made in a timely and well structured way .

A crisis could involve a virus, a contamination or pollution, an accident or natural disaster. A gas pipeline could explode cutting off energy, a factory fire or cybersecurity incident could destroy your capabilities, a war overseas could decimate your supply chain, quality issues or a contamination could give rise to a massive product recall. It is crucial there is a tailored and well revised plan in place so when everything else is going to hell in a handcart and you’ve got that gut-wrenching sinking feeling, there will be the reassurance of a structure and a plan to help you.

Key Crisis Management Requirements

  1. A crisis management plan should be individually tailored to your business, kept up to date, listing key decision makers, experts and responsibilities. This should be regularly reviewed/tested and any recommendations implemented
  2. Allocate clear roles and responsibilities – all key areas should have a designated decision maker and a deputy if they are not available. Full contact details should be available and up to date. Key stakeholders such as legal specialists, insurers, enforcement agencies, relevant consultants and test houses should be listed with contact details. Relevant suppliers and customer details should be available. Additional information such as the profile of likely consumers, key contract terms and sales history should be available to feed into any investigation, risk assessment or eventual withdrawal/recall.
  3. An escalation process to the relevant decision-making team should be set out and who will decide on the risk factor provided for the crisis/potential crisis.  A standard report form and process should ensure that relevant facts are collated so strategic decisions can be made. A process for each decision should be structured.  Reference to any required or recommended notifications provided. Legal will be able to provide advice on the regulatory position and assist in due diligence. Legal advice or litigation privilege will mean that confidential documents kept within a small team would not be discloseable to enforcement authorities. Therefore, investigations may be kept confidential up until a decision is made.  
  4. Clarity of communication will be vital, with details of how a decision will be made and by whom, alongside the input of legal, regulatory, operations and sales. There should be formats of standard communications for differing recipients ie letters to customers and suppliers, there should be an agreed point of liaison with enforcement authorities and media enquiries. Communication should be authentic and prioritise safety at all times; must be aligned with brand values, and tailored to the various stakeholders.
  5. The communications strategy should incorporate a clear understanding of its objective and should be via one channel only to avoid contradiction. Legal should be a key part of this to avoid inadvertent admissions on liability or voiding certain contracts/insurance etc.
  6. All likely hazards should be considered in advance - A full Hazard Analysis Critical Control Point (HACCP) plan should incorporate all major risks and seek to protect against them at vulnerable points within not only the supply chain but all the business activities.
  7. The crisis management plan should be linked to a business continuity plan. Are there alternative production facilities or suppliers? Alternative storage? Alternative fuel source?
  8. Check insurance policies and terms, check notification obligations, recall coverage and obligations, check excess.
  9. Check contractual terms of supply and distribution agreements; are there any penalty clauses? Terms of business interruption and force majeure, who keeps deposits and on what terms are items payable? What are termination clauses?
  10. Health and safety legislation obliges employers to provide a safe as reasonably practicable environment for staff and visitors; suitable risk assessments for employees and other persons affected by the work activities should be carried out and all reasonable precautionary measures implemented.
  11. Keep abreast of new developments – legal, scientific and medical that may affect your product / assist you in protecting against risks and so protecting your customers, consumers and employees
  12. Review – Crisis management plans should be living things, adapting and evolving to changing circumstances and being kept updated. They should not be kept on a dusty shelf but rather the people involved in executing the plan should be trained and the process tested with real life potential scenarios involving cross sections of teams that may affect your business and your brand.    Is the plan still relevant, are there any gaps, keep it updated.
  13. Recommendations – Whether it’s a training exercise or a real-life crisis, when the dust has settled don’t leave things there. What did or may have caused the crisis?  Is there anything that can be done to reduce the likelihood of that happening/happening again?  How can the business respond more effectively in the future?  Can anything be improved?  

    Most importantly, when recommendations are made, don’t just leave them on a list as evidence that you have fallen short of your own requirements, but rather make sure they are actually implemented.

If events occur in the future that had happened before/you had envisaged but not actively worked against there is the potential for criminal negligence, voiding of insurance and reputation damage. A strong leadership will have the understanding and agility to put in place measures for responsibility and this will help to ensure that employees and third parties will similarly be empowered to take responsibility and learn lessons.

Whilst some businesses come out of crises stronger, having used them as an opportunity to force positive change, it is far better to stress-test each component part ahead of a crisis.  You will know your vulnerabilities and how to protect them best.  But also, think about the businesses’ values and priorities, have these help provide the underlying objectives for any plan.

Please let our specialist team know if you would like Mills & Reeve to be part of your crisis management; we can provide a sounding board on the decisions, legal advice and privilege for confidential documents as well as regulatory and risk assessment input. We can also review crisis management plans and provide training.

Our own crisis management webinar is recorded and accessible here Legal webinars | Access the latest webinars from our legal experts | Mills & Reeve (mills-reeve.com)

Rise in E Coli cases across UK

The UK Health Security Agency has reported 113 confirmed cases of STEC e.coli.  Based on the wide geographic spread of cases, the UKHSA said it was most likely that the outbreak was linked to a nationally distributed food item or multiple food items.

The source of the outbreak was not yet confirmed.  However, these specific varieties of e.coli were a particular risk for raw milk cheeses, undercooked meat or fresh produce like salad vegetables.  It is often transmitted by eating contaminated food but can also be spread by close contact with an infected person, as well as direct contact with an infected animal or its environment.

As of 4 June, there have been 113 confirmed cases associated with this outbreak of STEC 0145 in the UK, all reported since 25 May 2024.

Mondelēz recieves €337.5m Competition Fine

The European Commission has fined Mondelēz International €337.5m for hindering the cross-border trade of chocolate, biscuits and coffee products between EU member states. It was ruled following an investigation by the Commission that the actions of Mondelēz represented a breach of EU competition rules.

It was found that Mondelēz had illegally restricted retailers from sourcing products from member states where prices are lower to maintain higher prices. It was reported the price differences between member states for chocolate ranged between 10% and 40%. A reduction of 15% was provided for the cooperation by Mondelez.

A previous review into the facts of this case is available at separate site Food Navigator Mondelēz International under investigation (foodnavigator.com)

CMA Complaint ’responsibly sourced’

Campaign group 'Open Seas' has submitted a complaint to the Competition and Markets Authority (CMA) about the use of the term ’responsibly sourced’ in the labelling of scampi and alleged this was misleading consumers.

The complaint referred to specific supermarkets including Co-op, M&S, Sainsbury’s and Tesco.

Whilst the use of the claim was reported to be “in line with strict third-party guidance from the Sustainable Seafood Coalition”, Open Seas have argued the definition of responsible had been redefined “to suit the interests of companies that have a direct financial interest in selling seafood”.

The use of complaints to the CMA either to raise profile of activist groups or to pressure food companies will become more likely and carry even greater risk after the passing of the Digital Markets, Competition and Consumers (DMCC) Act on 24 May.  The Act is expected to come into force in autumn this year.

The Competition and Markets Authority (CMA) will now have the power to directly enforce consumer protection laws in the UK and sanction breaches and will cover misleading consumer claims, including misleading environmental claims ie greenwashing.  This will mean that cases will no longer need to go through the courts so there will not be the judicial brake on the CMAs powers of enforcement. In recent years the CMAs investigations have been particularly on green advertising claims and fair pricing.

The use of this tactic of raising complaints by activist groups is therefore likely to carry the potential for greater risk for food businesses.

Corporate Sustainability Due Diligence Directive (CSDDD).

On 24 May 2024, the Council of the EU has formally adopted the Corporate Sustainability Due Diligence Directive (CSDDD). The European Council’s press release is available Corporate sustainability due diligence - European Commission (europa.eu).

The CSDDD requires in-scope organisations to:

  • identify and address any actual or potential impacts on the environment and human rights caused by the organisations, their subsidiaries and value chains; and
  • use “best efforts” to implement a transition plan to mitigate the effects of climate change which aligns with the Paris Agreement’s net zero objectives.

What to do about risks and harms?

After uncovering human rights or environmental harms or risks in its chain of activities, such as forced labour or water pollution, companies must then take “appropriate measures” to address them. In the case of actual harm, addressing means to bring the harm to an end or, when it is not possible to bring it to an end, to minimise it and remediate the damage caused. Remediation is not just about financial compensation, but also restoration to how things were before the harm occurred, such as cleaning up an oil spill. In the case of risks, addressing means to prevent the risk from materialising and if it is not possible, then to “adequately mitigate” the risk. The “appropriate measures” a company will need to take in any given harm or risk scenario will depend on the actual circumstances, but they will need to be effective.

Transition Plans to Net Zero

The purpose and aim of the transition plans are to ensure that the company’s business model and strategy are compatible with the sustainable economy transition and the objectives of limiting global warming to 1.5 degrees Celsius and the EU’s pledge to achieve climate neutrality by 2050. Companies will be required to set time-bound emission reduction targets (for scope 1 to 3 emissions), describe the decarbonisation levers and take implementing actions, as well as to adjust their business model accordingly.

Which organisations will be subject to the CSDDD?

EU states will have two years to transpose the CSDDD into national law. It will initially apply to organisations with over 5,000 employees and revenue greater than €1.5 billion and will then be phased in so that by 2029 it will apply to:

  • organisations based in the EU who have more than 1,000 employees and more than €450,000,000 (net) turnover worldwide; and
  • organisations based outside of the EU with a turnover of €450,000,000 (net) within the EU.

The rules on corporate sustainability due diligence will be enforced through:

  • Administrative supervision: Member States will designate an authority to supervise and enforce the rules, including through injunctive orders and effective, proportionate and dissuasive penalties (in particular fines). At European level, the Commission will set up a European Network of Supervisory Authorities that will bring together representatives of the national bodies to ensure a coordinated approach.
  • Civil liability: Member States will ensure that victims get compensation for damages resulting from an intentional or negligent failure to carry out due diligence.

The Directive will enter into force 20 days after its publication in the Official Journal of the European Union. Member States will have two years to transpose the Directive into national law and communicate the relevant texts to the Commission. One year later, the rules will start to apply to companies, with a gradual phase-in between 3 and 5 years after entry into force.

Please also see  European Commission adopts the Corporate Sustainability Due Diligence Directive | Mills & Reeve (mills-reeve.com)

Ultra processed foods or UPFs to be key issue after election

The House of Lords select committee on food, diet and obesity recently called for evidence on ultra processed foods or UPFs, HFSS foods and obesity. The aim of the committee is to assess how shifts in behaviours and trends have impacted obesity, how government policies have influenced these shifts, and the role of the industry and the wider public in the public health landscape.  The Lords’ inquiry will resume after the 4 July election.

Nutrition – and access to it – is a complex problem. The debate needs to be scientific and evidence-based.  The Scientific Advisory Committee on Nutrition (SACN), which previously raised concerns over the impact of UPF also raised doubts over the quality of the evidence to prove its links with bad health outcomes stating there were “uncertainties around the quality of evidence available”.  Please see 'Ultra Processed' Foods and Statistics - Mills & Reeve (mills-reeve.com)

The SACN will assess the latest evidence at a meeting on 20 June before making recommendations to the new government later in the year.

McDonalds EU Big Mac Trade Mark not extended to Poultry

McDonald's has not been provided its EU trade mark Big Mac in respect of poultry products following a judgment of the European General Court.  The court held that McDonald’s had failed to prove that it was genuinely using the Big Mac label over a five-year period for chicken sandwiches, poultry products or restaurants. McDonald’s loses the EU trade mark Big Mac in respect of poultry products (europa.eu)

Plant based alternatives and the use of defined names in Trade Marks vs Descriptives and possible divergence in approach UK and EU

There have been several recent cases in UK and EU concerning the use of descriptive terms in the branding of alternative plant based food products which specifically do not contain the named ingredient.  Descriptive trade marks can be very difficult to register, there is also a distinction between trade mark registration and food marketing and labelling.  There appears to be a different approach taken between EU and UK courts in their application to defined terms.

Trade marks that merely describe the characteristics of a product, such as its ingredients or nature, generally lack distinctiveness and may not benefit of trade mark protection. Although descriptive terms may be eligible for trademark protection if they acquire a secondary meaning, indicating a strong association with a specific brand over time and each case is likely to turn on its own specific facts.

Not Milk

The latest of which concerns a Chilean plant-based food manufacturer who failed to register the trade mark 'Not Milk', after a European court refused on the basis of descriptiveness/ lack of distinctiveness. By decision of 8 May 2024 (T-320/23), the General Court (GC) confirmed that the sign "NOT MILK" was in fact descriptive of the products in classes 29 and 32, and that the graphical elements did not significantly alter its descriptive nature.

Mybacon

Previously this year food company Myforest Foods Co. failed in their appeal to register the trade mark “MYBACON” for its plant-based food product (Myforest Foods Co. v EUIPO, Case T‑107/23).  The EU General Court agreed with the EUIPO that the mark “MYBACON” was likely to mislead the public about the characteristics of the products to which it was to be applied, which were plant-based meat substitutes. (CURIA - Documents (europa.eu))

Post Milk Generation

In the recent Oatly UK case the trade mark ‘POST MILK GENERATION’ was found by the UK High Court to be validly registered.  It found the use of the term ‘milk’ in Oatly’s marketing did not amount to its products being “designated” to consumers as dairy products, so there was no deception (Oatly AB v Dairy UK Ltd [2023] EWHC 3204 (Ch)).

This therefore distinguishes against TofuTown case (Verband Sozialer Wettbewerb eV v TofuTown.com GmbH, Case C-422/16) that found the term ‘milk’ could not be used to describe plant-based products in marketing, even if accompanied by the use of additional descriptive language to clarify its intended meaning Purely plant-based products cannot, in principle, be marketed with designations such as ‘milk’, ‘cream’, ‘butter’, ‘cheese’ or ‘yoghurt’, which are reserved by EU law for animal products (europa.eu). This was found because the trade mark in Oatly does not describe any product.

In this case, the Mark was registered for a variety of goods in different classes and, although it may well have been used in their marketing, it does not purport to market them as any particular product, let alone as milk.”

Legislation:  The use of the term ‘milk’ is specifically legislated via Regulation (EU) No 1308/2013 which defines the term ‘milk’ as the “normal mammary secretion obtained from [..] milking”, ‘milk products’ as those derived exclusively from animal milk, and ‘composite products’ as those in which milk or a milk product is an essential element. It goes on to state that:

  1. the term ‘milk’ cannot be used for any product that does not satisfy that definition, regardless of whether the term is used in the product description or in a trade mark (the “definition prohibition”); and
  2. use of this term in advertising (even if not on products) must not claim or suggest that the product is a dairy product if it is not (the “advertising prohibition”).

Use of the term ‘milk’ would be permitted only to describe the raw materials and to list ingredients there are also specific exceptions ie “coconut milk” due to longstanding traditional usage. 

Animal Welfare high on agenda

Similar to the five step classification proposed in the recently closed consultation for fairer food labelling, French food agency ANSES is proposing a system classifying standards from the highest (A) to the lowest ( E).  E would mean simply meeting legislative requirements. If no welfare information on the animals parents is available then any product could only receive a ‘C’ rating.

This is similar to the proposal Fairer Food? But for who? A Consultation on Labelling - Mills & Reeve (mills-reeve.com) that also sets out proposals to require ‘method of production’  labelling on pork, chicken and eggs and includes a mandatory five-tier label for both domestic and imported products which would differentiate between those that fall below, meet and exceed baseline UK animal welfare regulations.

As part of its Election Manifesto for the upcoming UK General Election, Labour has announced that, if elected, it will ban the import of foie gras. Steve Reed, Shadow Secretary of State for Environment, Food and Rural Affairs.  Foie gras imports were due to be banned last year under the Animals Abroad Bill Animal Welfare Action Plan Published - How may this may affect Farmers & Food Producers? - Mills & Reeve (mills-reeve.com)  with the support of several Conservative members but was shelved in May 2023.

Farming Recovery Fund – A welcome expansion

New eligibility criteria in the £50m Farming Recovery Fund has expanded the scheme to more farmers who have suffered significant damage to their land as a result of wet weather as an “exceptional, one-off intervention to respond to the exceptionally wet conditions”.

The Rural Payments Agency will identify farmers who are eligible for the payment and contact them with payments expected to be made to eligible farmers this summer.

Water on Farms Ruling

On 24th May the High Court rejected all claims that the Environment Agency has failed to effectively enforce its Farming Rules for Water (FRfW).  Campaign group River Action had accused the agency of not properly policing farm pollution.

Established by Defra in 2018, the Farming Rules for Water (FRfW) were introduced to reduce and prevent diffuse water pollution from agricultural sources. They are applicable to all farmers and land managers across England and work to safeguard water quality and minimize agricultural pollution. High court ruling on Farming Rules for Water – Defra in the media (blog.gov.uk)

In his ruling, Justice Dove found no fault with the Environment Agency’s approach to enforcing the Farming Rules for Water, noting that its approach has been grounded in the correct interpretation of Regulations.

The FRfW were drawn up in 2018 with input from agricultural and environmental stakeholders to build on the good progress that many farmers are already making to tackle pollution as a result of their activities. The Rules set out that farmers are responsible for always taking reasonable precautions to minimise the risk of pollution from applications of nutrients to land and livestock management.

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Every piece of content we create is correct on the date it’s published but please don’t rely on it as legal advice. If you’d like to speak to us about your own legal requirements, please contact one of our expert lawyers.

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